Top Management Team Tenure and Top Manager Causal Attributions at Declining Firms Attempting Turnarounds

Abstract

Do members of long-tenured top management teams perceive organizational problems differently than members of shorter-tenured teams? We examined this question using the reasons that chief executive officers and other top managers at firms attempting turnarounds offered for their firms' performance declines. Drawing insights from social psychology and the literature on organizational decline and turnaround, we predicted that top managers who were members of management teams where many top executives had been replaced would be more likely to attribute performance problems to causes that were internal to the firm, stable, and controllable than top managers from longer-tenured teams. The results confirmed our predictions and suggest that the composition of the top management team, which can be altered through the replacement of executives, is strongly associated with the perception of problems at firms attempting to recover from firm-threatening performance declines.